Arctic meltdown has a silver lining for business

Thursday, 28 February, 2008, 12:00am

David Fullbrook

Since the dawn of history, the Arctic has been locked up with snow and ice, a dead end of little consequence for East Asia. But the ice is melting, and quickly, focusing minds in the littoral states. It should also be focusing minds in the capitals and boardrooms of East Asia.

Last year was a turning point. In December, Nasa climate scientist Jay Zwally predicted that the Arctic Ocean would be practically ice-free by the end of summer 2012. Even a decade ago, such a prediction would have been extreme. But the rate at which the Arctic ice cap has receded and thinned in recent summers, setting records in 2005 and 2007, has changed everything. Year-round ice-free coasts for Arctic states, even an end to the ice cap, seem certain, perhaps in a few decades.

As the ice melts, more solar radiation is absorbed, making Arctic seas, mountains and air warmer still. The likely consequences are faster melting of Greenland's ice sheet and glaciers, and the expansion of seawater, causing seas to rise faster.

Overall, the Intergovernmental Panel on Climate Change predicts that, during this century, the average global climate will be between 1 degree and 6 degrees Celsius warmer, while seas could rise 59cm.

However, Nasa scientist James Hansen, a leading figure in climate change research since the 1980s, points out that, when temperatures warmed a few degrees from their current levels a few million years ago, seas rose 25 metres. A rise seems certain, though by how much and how fast remains conjecture.

Nevertheless, governments from Tokyo to Jakarta should be instigating inquiries and convening conferences to begin orderly preparations. If matters are in hand, they are going about it very quietly.

While scientists are figuring out how high seas will rise, a more definite consequence of a warmer Arctic is new patterns of trade. Korea and Japan will no longer be at the end of the line, but will become key way stations, as shipping from China takes shorter routes through the Bering Strait and the Arctic to reach eastern America and Europe. Such routes could shave a week off current shipping times.

Last March, Mead Treadwell, chairman of the US Arctic Research Commission, estimated that it would cost US$500 to ship a container from the Aleutian Islands, part of Alaska, to northern Europe - against US$1,500 to move it from Yokohama via the Suez Canal. Shipping via the Arctic would ease pressure on the canal, freeing up space for increasing trade between Europe and India, not to mention Southeast Asia.

Cheaper, faster shipping via the Arctic raises the prospect of sharpening the competitiveness of northeast China, Korea, Japan and Russia's Far East. A renaissance looms for depressed cities; new ones, along with ports, may rise.

The prospect of crucial sea lanes linking East Asia and Europe through northern Pacific waters will raise new security issues. Coincidentally, China and Japan are already locked in an arms race to assert their presence in these seas. Russia may yet join in, if it uses some of its petrodollars to upgrade its broken navy.

A warming Arctic is already attracting business. Samsung will launch a 120,000-tonne ice-hardened oil tanker for Russia to use in its Arctic oil fields next year. There has also been much talk about huge reservoirs of oil and gas beneath the Arctic. Little is proven, but, with less ice, fish may multiply in the Arctic, which might offset some of the losses from overfishing in Asia's own waters.

Back on land, warmer climes will make minerals buried beneath Siberia's permafrost more accessible. Land could open up for farming. Among the customers for the treasures of the Arctic will doubtless be China and India.

A new epoch is dawning. There is no reason to dilly-dally over tackling the challenges or seizing the opportunities for prosperity.

David Fullbrook is an independent researcher and writer on Asian affairs